Senators offer tax bill aimed at helping small businesses

Senators offer tax bill aimed at helping small businesses

A bipartisan pair of senators is offering legislation aimed at preventing small businesses from paying a higher tax rate than large corporations.

The legislation, offered by Sens. Bill NelsonClarence (Bill) William Nelson2020 party politics in Puerto Rico There is no winning without Latinos as part of your coalition Dem 2020 candidates court Puerto Rico as long nomination contest looms MORE (D-Fla.) and Susan CollinsSusan Margaret CollinsGraham: 'Handful' of GOP senators will vote to block Trump's emergency declaration Dems set up Tuesday vote to block Trump's emergency declaration The Hill's Morning Report — Emergency declaration to test GOP loyalty to Trump MORE (R-Maine) this week, comes as Congress works to pass tax-reform legislation this year. A House version of the senators' bill was previously introduced by Rep. Vern Buchanan (R-Fla.) and is referenced in House Republicans' tax-reform blueprint.

“Small businesses are the cornerstone of our local economies, and this bill is just one way we can help them succeed,” Nelson said in a news release.

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Most small businesses are "pass-through" entities whose income is currently taxed through the individual tax code rather than the corporate tax code. The top individual tax rate is 39.6 percent, while the corporate tax rate is 35 percent.

Under the bill from Nelson and Collins, income from pass-through businesses would be treated like corporations' income.

Buchanan said he was pleased to see momentum build for the legislation in the upper chamber.

“I’m thrilled that two prominent senators this week introduced my Main Street Fairness Act in the Senate,” he said. “This shows the broad support for making sure that no small business pays a higher tax rate than large companies or corporations.”

The House GOP tax blueprint states that it builds on the concepts in the small business bill. The blueprint lowers the top rate for individuals to 33 percent, the top rate for pass-through businesses to 25 percent and the top rate for corporations to 20 percent.